BLACKROCK WORLD MINING TRUST PLC
BLACKROCK WORLD MINING TRUST plc
All information is at 30 June 2016 and unaudited.
Performance at month end with net income reinvested
One Three One Three Five
Month Months Year Years Years
Net asset value 23.0% 27.6% 9.2% -20.8% -56.7%
Share price 19.8% 23.7% 3.1% -22.9% -53.9%
Euromoney Global Mining Index 22.7% 27.4% 12.1% -6.6% -48.4%
(Total return)
Sources: BlackRock, Euromoney Global Mining Index, Datastream
At month end
Net asset value including income*: 315.99p
Net asset value capital only: 309.69p
*Includes net revenue of 6.30p
Share price: 270.25p
Discount to NAV**: 14.5%
Total assets: £631.9m
Net yield***: 7.8%
Net gearing: 12.7%
Ordinary shares in issue: 176,455,242
Ordinary shares held in treasury: 16,556,600
Ongoing charges****: 1.2%
** Discount to NAV including income.
*** Based on an interim dividend of 7.00p and a final dividend of 14.00p per
share in respect of the year ended 31 December 2015.
**** Calculated as a percentage of average net assets and using expenses,
excluding finance costs, for the year ended 31 December 2015.
Sector % Total Country Analysis % Total
Assets Assets
Diversified 32.0 Global 49.9
Gold 26.4 Latin America 16.7
Copper 17.6 Australasia 9.7
Silver & Diamonds 16.0 Other Africa 8.4
Nickel 3.3 Canada 7.7
Industrial Minerals 3.3 Emerging Europe 3.4
Zinc 0.5 South Africa 2.7
Other 0.2 Belgium 0.5
Iron Ore 0.1 Indonesia 0.4
Net current assets 0.6 Net current assets 0.6
----- -----
100.0 100.0
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Ten Largest Investments
% Total
Company Assets
BHP Billiton 9.0
Rio Tinto 7.6
First Quantum Minerals 6.8
Fresnillo 5.2
Lundin Mining 4.6
Newcrest Mining 3.6
Glencore 3.5
Cerro Verde 3.4
Norilsk Nickel 3.3
Newmont Mining 3.1
Commenting on the markets, Evy Hambro and Olivia Markham, representing the
Investment Manager noted:
Global equity markets, as displayed by the MSCI World Index (total return),
declined by -1.1% in June. The mining sector continued its rally, after a
brief pause in May, rebounding strongly as global volatility and
uncertainty increased after the United Kingdom's surprise decision to leave
the European Union (the Euromoney Global Mining Index total return in
sterling returned +22.7% in June). The base metals increased across the
board with copper, aluminium and nickel finishing the month +3.1%, +6.4%
and +9.3% higher respectively.
Data from China has continued to be mixed; infrastructure spend has held up
well and May's PMI data was unchanged from the previous month which
provided price support. However, Chinese investment slowed to a 15 year low
and fixed asset investment growth was disappointing, with a particularly
strong deceleration in private investment.
The increased uncertainty in markets was supportive for gold and silver as
investors fled to safe-haven assets. The gold price increased by 5% on the
day of the Brexit result, with gold trading above $1,300/oz, and this price
level has since held through the subsequent rebound in risk assets in the
final days of the month to close the month at $1,321/oz. Silver rallied
strongly, finishing the month +16% higher at $18.80/oz. Silver typically
follows gold's trajectory with a slight lag and this year has been no
different. The gold/silver ratio fell to a two-year low over the month,
having been at its 52 week high in March this year.
The Company outperformed the broader UK market following the Brexit
decision due to its precious metals exposure and currency exposure, as the
large majority of the Company's assets are denominated in US dollars. Given
this exposure to US dollar based assets, the subsequent decline in sterling
has also seen the discount to net asset value (NAV) widen, peaking at ~19%
towards the end of June.
Diamond equities suffered during the month as the diamond price pulled back
due to concerns around liquidity conditions in the diamond market and a
potential weakening in luxury spend following the announcement of the
Brexit vote.
Strategy and Outlook
Price moves in the mining sector year to date, albeit off an unsustainably
low base, have been reminiscent of the times of strong global demand growth
and raw material constraints, neither of which have been a feature of
present market conditions. Weaker growth in the developed economies, poor
figures from some emerging markets and continuing oversupply in the mined
commodities appeared to catch up with this recent rally, ultimately leading
to a pull-back.
However, the miners have continued to make progress and whilst supply can
be sticky for a number of reasons a cash negative operation cannot persist
indefinitely. We have seen the first of the long-awaited supply cuts
announced but mined commodity prices will need to remain at current levels
or move lower before we see real momentum in cuts. In light of this, we
expect to see companies further reduce capital spending and operating costs
in the second half in order to bolster their balance sheets.
All data points are in US dollar terms unless stated otherwise.
19 July 2016
ENDS
Latest information is available by typing www.brwmplc.co.uk on the
internet, "BLRKINDEX" on Reuters, "BLRK" on Bloomberg or "8800" on Topic 3
(ICV terminal). Neither the contents of the Manager's website nor the
contents of any website accessible from hyperlinks on the Manager's website
(or any other website) is incorporated into, or forms part of, this
announcement.
BLACKROCK WORLD MINING : Portfolio Update
July 19, 2016 at 06:05 am EDT
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© PRNewswire - 2016
